The Guatemalan apparel and textile industry, relatively new to the world market, has a range of favorable conditions that have allowed to develop into a highly competitive cluster. 

Guatemala has the most manufacturing businesses in Central America.

Registered Companies and Employees  2003

Source: Clothing and Textiles Commission of the Association of Non Traditional Export Products–AGEXPRONT-.

Guatemala also has the most companies in the cut and sew industry (clusters), among which the accessories and services providers are found.  More than 72% of the cut and sew businesses’ capital comes from foreign investment.

Sources of Investment Capital 2003

Source: Clothing and Textile Commission
In the last couple of years the industry has been transitioning from selling productivity to selling “the complete package”, which includes supplying services and basic designs. Currently, there are many businesses operating under this format.  This represents an important change for the Guatemalan industry, since it has just started to compete as an integrated industry.  This new approach offers a variety of higher value added services instead of just competing with lower labor costs.

  
Guatemala is blessed with an exceptional human resources base that can easily be trained to reach high levels of productivity.  Two of the ten local universities offer bachelor and engineering degrees focused on cut and sew operations, and a Textile Industry Technology Center of Confection – CTC, has also been inaugurated. 
Technical training also plays an important role in this field.  Several organizations, such as the Apparel and Textile Commission collaborate with the organization and implementation of employee training at all levels in this area.
The Technical Institute of Training and Productivity (INTECAP), is the largest vocational training institute in the country, with more than 140,000 participants annually. Through this institution it is possible to train the human resources of an industry with a direct cost equivalent to 1% of payroll. The institute graduates technical specialists in fields such as tourism, hotel management, metalworking, data processing, finance, textiles, call centers, telemarketing and telecommunications.  This institution offers three different vocational levels: executive, middle level, and operational. It offers technical training in fields such as tourism, hotel management, metalworking, data processing, finance, textiles, call centers, telemarketing, and telecommunications. These are taught through industry-specific activities such as seminars throughout the country.

In 2003, the apparel and textile industry generated more than 140,000 direct jobs, nearly 3% of the Economically Active Population (EAP) of the country, positioning itself as one of the main generators of employment.  
The apparel and textiles industry has been of great importance to Guatemala in the past years. In 2003, $1,480.69 million dollars were exported in F.O.B. value and $422.6 million in added value dollars.

FOB Exports to the United States  (US$ millions) 1994-2003  

In this area, the majority of the raw materials are provided by the buying countries (mainly the United States): however, it has been noted that national raw materials are increasingly being used. In 2003 Guatemalan raw materials used in the production of clothing increased 36% in comparison to 2002.  The last Central American benchmark analyzed by the Apparel and Textile Committee, VESTEX, included international clients’ perceptions of the industry. Here clients consistently mentioned that Guatemalan products are of higher quality than those products offered by other Central American countries.
They also indicated that they preferred Guatemala as the location for their businesses because it is the most developed country in the region, it boasts close proximity to the United States and it has well-run facilities and services.

Source: www.investinguatemala.org